The results are in

By Greg Smith, Head of Retail at Devon Funds

August was anything but dull for markets. After the “panic attack” at the start of the month, global benchmarks rebounded, led by the US indices. The Dow Jones made a new record high. The S&P500 was down 6% for the month at one point (and 8.5% from its July highs), before ending the month up 2.4%. Fears over a hard landing were put on the back burner as economic data continued to largely be on the resilient side of the ledger. The US earnings season had some high-profile ‘misses’ but was largely positive, with around 80% of S&P constituents reporting better than expected earnings, while outlook statements were not too downbeat.

Lower than expected inflation prints, including for the Fed’s preferred inflation gauge, also effectively locked in the view that the central bank was ready to start easing rates at the September meeting, and paving the way for a soft economic landing for the world’s largest economy.

The RBNZ had already commenced down the easing path, and after a very strong performance in July, the kiwi market performed much more modestly in July. The NZX50 added 0.3% for the month. The slightly positive performance though was underpinned by a 10% lift in benchmark heavyweight Fisher & Paykel Healthcare after the company lifted guidance. At the other end, falls for a2 Milk (-23%) and Spark NZ (-17%) weighed, after missing the mark on earnings and guidance respectively in what was a relatively mixed reporting season.